Exhibit 99.3
------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
by and between
EUNIVERSE, INC.
and
550 DIGITAL MEDIA VENTURES INC.
-------------------
Dated as of October 24, 2001
------------------------------------------------------------------------------
TABLE OF CONTENTS
1. Certain Definitions..................................................3
2. Demand Registrations.................................................4
(a) Right to Request Registration....................................4
(b) Number of Demand Registrations...................................5
(c) Priority on Demand Registrations.................................5
(d) Restrictions on Demand Registrations.............................5
(e) Selection of Underwriters........................................6
(f) Other Registration Rights........................................6
(g) Effective Period of Demand Registrations.........................6
3. Piggyback Registrations..............................................7
(a) Right to Piggyback...............................................7
(b) Priority on Primary Registrations................................7
(c) Priority on Secondary Registrations..............................7
(d) Selection of Underwriters........................................8
(e) Other Registrations..............................................8
4. S-3 Registrations....................................................8
5. Holdback Agreements..................................................8
6. Registration Procedures..............................................9
7. Registration Expenses...............................................12
8. Indemnification.....................................................13
9. Participation in Underwritten Registrations.........................15
10. Rule 144............................................................15
11. Miscellaneous.......................................................15
(a) Notices.........................................................15
(b) No Waivers......................................................16
(c) Successors and Assigns..........................................16
(d) Governing Law...................................................16
(e) Jurisdiction....................................................16
(f) Waiver of Jury Trial............................................17
(g) Counterparts; Effectiveness.....................................17
(h) Entire Agreement................................................17
(i) Captions........................................................17
(j) Severability....................................................17
(k) Amendments......................................................17
(l) Equitable Relief................................................18
(m) Costs and Expenses. ...........................................18
REGISTRATION RIGHTS AGREEMENT dated as of October 24, 2001, between
eUniverse, Inc., a Nevada corporation (the "Company"), and 550 Digital Media
Ventures Inc., a Delaware corporation (the "Stockholder").
In consideration of the mutual covenants and agreements herein
contained and other good and valid consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties to this Agreement hereby agree
as follows:
1. Certain Definitions.
In addition to the terms defined elsewhere in this Agreement, the
following terms shall have the following meanings:
"Affiliate" of any Person means any other Person which directly or
indirectly through one or more intermediaries controls, or is controlled by,
or is under common control with such Person. The term "control" (including the
terms "controlled by" and "under common control with") as used with respect to
any Person means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
"Agreement" means this Registration Rights Agreement, including all
amendments, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to this Registration Rights Agreement as the
same may be in effect at the time such reference becomes operative.
"Business Day" means any day on which commercial banks are open for
business in New York, New York.
"Common Stock" means common stock, par value $.001 per share, of the
Company.
"Conversion Shares" means any of (x) the shares of Common Stock owned
by the Stockholder, (y) the shares of Common Stock issued or issuable upon
conversion of the Series B Preferred Stock or (z) any securities issued or
issuable with respect to the Common Stock or Series B Preferred Stock by way
of stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization or
otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" means any holder of record of Registrable Common Stock (as
defined below) and any transferees of such Registrable Common Stock from such
Holders (or in the case of a Holder of Series B Preferred Stock, the
transferees of such Holder). For purposes of this Agreement, the Company may
deem and treat the registered holder of Registrable Common Stock as the Holder
and absolute owner thereof, and the Company shall not be affected by any
notice to the contrary.
"Person" means an individual, partnership, corporation, trust,
limited liability company, or unincorporated organization, or a government or
agency or political subdivision thereof.
"Prospectus" means the prospectus or prospectuses included in any
Registration Statement, as amended or supplemented by any prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Common Stock covered by such Registration Statement and by all
other amendments and supplements to the prospectus, including post-effective
amendments and all material incorporated by reference in such prospectus or
prospectuses.
"Purchase Agreement" means the stock purchase agreement, dated as of
July 13, 2001, between the Company and the Stockholder.
"Registrable Common Stock" means the Conversion Shares. All
references herein to a "Holder" or "Holder of Registrable Common Stock" shall
include the holder or holders of Series B Preferred Stock to the extent of the
Conversion Shares then underlying such Series B Preferred Stock. For purposes
of determining the number of shares of Registrable Common Stock held by a
Holder and the number of shares of Registrable Common Stock outstanding, for
purposes of this Agreement (including the definition of "Holder") but not for
any other purpose, any holder of record of Series B Preferred Stock shall be
deemed to be a Holder of the number of Conversion Shares issuable upon
conversion of such Series B Preferred Stock and all such Conversion Shares
shall be deemed to be outstanding shares of Registrable Common Stock.
"Registration Statement" means any registration statement of the
Company which covers any of the Registrable Common Stock pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective
amendments, all exhibits and all materials incorporated by reference in such
Registration Statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Series B Preferred Stock" means the Series B Convertible Preferred
Stock, par value $0.10 per share, of the Company held by the Stockholder.
"underwritten registration or underwritten offering" means a
registration in which securities of the Company are sold to underwriters for
reoffering to the public.
2. Demand Registrations.
(a) Right to Request Registration. Beginning two and one-half (2 1/2)
years after the date of this Agreement, any Holder or Holders who together
hold a majority of the then outstanding Registrable Common Stock ("Initiating
Holders") may request registration under the Securities Act of all or part of
the Registrable Common Stock ("Demand Registration").
Within 10 days after receipt of any such request for Demand
Registration, the Company shall give written notice of such request to all
other Holders of Registrable Common Stock and shall, subject to the provisions
of Section 2(d) hereof, include in such registration all such Registrable
Common Stock with respect to which the Company has received written requests
for inclusion therein within 15 days after the receipt of the Company's
notice.
(b) Number of Demand Registrations. Subject to the provisions of
Section 2(a), the Initiating Holders of Registrable Common Stock shall be
entitled to request an aggregate of five (5) Demand Registrations. A
registration shall not count as one of the permitted Demand Registrations (i)
until it has become effective, (ii) if the Initiating Holder requesting such
registration is not able to register and sell at least 50% of the Registrable
Common Stock requested by such Initiating Holder to be included in such
registration or (iii) in the case of a Demand Registration that would be the
last permitted Demand Registration requested hereunder, if the Initiating
Holder requesting such registration is not able to register and sell all of
the Registrable Common Stock requested to be included by such Initiating
Holder in such registration.
(c) Priority on Demand Registrations. Except as provided in Section
2(g), the Company shall not include in any Demand Registration any securities
which are not Registrable Common Stock without the written consent of the
Holders of a majority of the shares of Registrable Common Stock to be included
in such registration, or, if such Demand Registration is an underwritten
offering, without the written consent of the managing underwriters. If the
managing underwriters of the requested Demand Registration advise the Company
in writing that in their opinion the number of shares of Registrable Common
Stock proposed to be included in any such registration exceeds the number of
securities which can be sold in such offering and/or that the number of shares
of Registrable Common Stock proposed to be included in any such registration
would adversely affect the price per share of the Company's equity securities
to be sold in such offering, the Company shall include in such registration
only the number of shares of Registrable Common Stock which in the opinion of
such managing underwriters can be sold. If the number of shares which can be
sold is less than the number of shares of Registrable Common Stock proposed to
be registered, the amount of Registrable Common Stock to be so sold shall be
allocated pro rata among the Holders of Registrable Common Stock desiring to
participate in such registration on the basis of the amount of such
Registrable Common Stock initially proposed to be registered by such other
Holders. If the number of shares which can be sold exceeds the number of
shares of Registrable Common Stock proposed to be sold, such excess shall be
allocated pro rata among the other holders of securities, if any, desiring to
participate in such registration based on the amount of such securities
initially requested to be registered by such holders or as such holders may
otherwise agree.
(d) Restrictions on Demand Registrations. The Company shall not be
obligated to effect any Demand Registration within six months after the
effective date of a previous Demand Registration, a previous S-3 Registration
(as hereinafter defined) or a previous registration under which the Initiating
Holders had piggyback rights pursuant to Section 3 hereof wherein the
Initiating Holders were permitted to register, and sold, at least 50% of the
shares of Registrable Common Stock requested to be included therein. The
Company may (i) postpone for up to ninety (90) days the filing or the
effectiveness of a Registration Statement for a Demand Registration if, based
on the good faith judgment of the Company's board of directors, such
postponement or withdrawal is necessary in order to avoid premature disclosure
of a matter the board has determined would not be in the best interest of the
Company to be disclosed at such time or (ii) postpone the filing of a Demand
Registration in the event the Company shall be required to prepare audited
financial statements as of a date other than its fiscal year end (unless the
stockholders requesting such registration agree to pay the expenses of such an
audit); provided, however, that in no event shall the Company withdraw a
Registration Statement under clause (i) above after such Registration
Statement has been declared effective; and provided, further, however, that in
any of the events described in clause (i) or (ii) above, the Initiating
Holders requesting such Demand Registration shall be entitled to withdraw such
request and, if such request is withdrawn, such Demand Registration shall not
count as one of the permitted Demand Registrations. The Company shall provide
written notice to the Initiating Holders requesting such Demand Registration
of (x) any postponement or withdrawal of the filing or effectiveness of a
Registration Statement pursuant to this Section 2(d), (y) the Company's
decision to file or seek effectiveness of such Registration Statement
following such withdrawal or postponement and (z) the effectiveness of such
Registration Statement. The Company may defer the filing of a particular
Registration Statement pursuant to this Section 2(d) only once every 12
months.
(e) Selection of Underwriters. If any of the Registrable Common Stock
covered by a Demand Registration or an S-3 Registration pursuant to Section 4
hereof is to be sold in an underwritten offering, the Initiating Holders shall
have the right to select the managing underwriter(s) to administer the
offering subject to the approval of the Company, which will not be
unreasonably withheld.
(f) Other Registration Rights. The Company shall not grant to any
Person the right, other than as set forth herein and except to employees of
the Company with respect to registrations on Form S-8 (or any successor forms
thereto), to request the Company to register any securities of the Company
except such rights as are not more favorable than or inconsistent with the
rights granted to the Holders herein. The stock transfer restriction imposed
on the shares of the Company's Capital Stock held by Xxxx Xxxxxxxxx (the
"Xxxxxxxxx Restrictions") are not more favorable than or inconsistent with the
stock transfer restrictions contained in this Agreement. In the event the
Company grants rights which are more favorable or relaxes the Xxxxxxxxx
Restrictions, the Company will make such provisions available to the Holders
and will enter into any amendments necessary to confer such rights on the
Holders.
(g) Effective Period of Demand Registrations. After any Demand
Registration filed pursuant to this Agreement has become effective, the
Company shall use its best efforts to keep such Demand Registration effective
for a period equal to 180 days from the date on which the SEC declares such
Demand Registration effective (or if such Demand Registration is not effective
during any period within such 180 days, such 180-day period shall be extended
by the number of days during such period when such Demand Registration is not
effective), or such shorter period which shall terminate when all of the
Registrable Common Stock covered by such Demand Registration has been sold
pursuant to such Demand Registration. If the Company shall withdraw any Demand
Registration pursuant to subsection (d) of this Section 2 (a "Withdrawn Demand
Registration"), the Initiating Holders of the Registrable Common Stock
remaining unsold and originally covered by such Withdrawn Demand Registration
shall be entitled to a replacement Demand Registration which (subject to the
provisions of this Section 2) the Company shall use its best efforts to keep
effective for a period commencing on the effective date of such Demand
Registration and ending on the earlier to occur of the date (i) which is 180
days from the effective date of such Demand Registration and (ii) on which all
of the Registrable Common Stock covered by such Demand Registration has been
sold. Such additional Demand Registration otherwise shall be subject to all of
the provisions of this Agreement.
3. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to register any
of its common equity securities under the Securities Act (other than a
registration statement on Form S-8 or on Form S-4 or any similar successor
forms thereto), whether for its own account or for the account of one or more
stockholders of the Company, and the registration form to be used may be used
for any registration of Registrable Common Stock (a "Piggyback Registration"),
the Company shall give prompt written notice (in any event within 10 business
days after its receipt of notice of any exercise of other demand registration
rights) to all Holders of its intention to effect such a registration and,
subject to Sections 3(b) and 3(c), shall include in such registration all
Registrable Common Stock with respect to which the Company has received
written requests for inclusion therein within 15 days after the receipt of the
Company's notice. The Company may postpone or withdraw the filing or the
effectiveness of a Piggyback Registration at any time in its sole discretion.
(b) Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering and/or that the number of shares of
Registrable Common Stock proposed to be included in any such registration
would adversely affect the price per share of the Company's equity securities
to be sold in such offering, the Company shall include in such registration
(i) first, the securities the Company proposes to sell, and (ii) second, the
Registrable Common Stock requested to be included therein by the Holders and
other securities requested to be included in such registration pro rata among
all the holders of such securities on the basis of the number of shares
requested to be registered by such holders or as such holders may otherwise
agree.
(c) Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of a holder of the
Company's securities other than Registrable Common Stock, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering and/or that the number of shares of
Registrable Common Stock proposed to be included in any such registration
would adversely affect the price per share of the Company's equity securities
to be sold in such offering, the Company shall include in such registration
(i) first, the securities the Company proposes to sell, and (ii) second the
Registrable Common Stock requested to be included therein by the Holders and
other securities requested to be included in such registration pro rata among
all the holders of such securities on the basis of the number of shares
requested to be registered by such holders or as such holders may otherwise
agree.
(d) Selection of Underwriters. If any Piggyback Registration is an
underwritten primary offering, the Company shall have the right to select the
managing underwriter or underwriters to administer any such offering.
(e) Other Registrations. If the Company has previously filed a
Registration Statement with respect to Registrable Common Stock pursuant to
Sections 2 or 4 hereof or pursuant to this Section 3, and if such previous
registration has not been withdrawn or abandoned, the Company shall not be
obligated to cause to become effective any other registration of any of its
securities under the Securities Act, whether on its own behalf or at the
request of any holder or holders of such securities, until a period of at
least three months has elapsed from the effective date of such previous
registration.
4. S-3 Registrations.
If at any time that the Company is eligible to use Form S-3 or any
successor thereto, any Holder or Holders requests that the Company file a
Registration Statement on Form S-3 or any successor thereto for a public
offering of all or any portion of the Registrable Common Stock held by such
Holders, then the Company shall use its best efforts to register under the
Securities Act on Form S-3 (an "S-3 Registration") or any successor thereto,
for public sale in accordance with the method of disposition specified in such
notice, the number of shares of Registrable Common Stock specified in such
notice; provided, however, that the Company shall have no obligation to
register such shares of Registrable Common Stock pursuant to this Section if
(based on the current market prices) the number of shares of Registrable
Common Stock specified in such notice would not yield gross proceeds to the
selling stockholders of at least $1,000,000. Whenever the Company is required
by this Section 4 to use its best efforts to effect the registration of
Registrable Common Stock, each of the procedures and requirements of Section 2
(including but not limited to the requirement that the Company notify all
Holders from whom notice has not been received and provide them with the
opportunity to participate in the offering) shall apply to such registration.
There is no limitation on the number of registrations pursuant to this Section
4 that the Company is obligated to effect.
5. Holdback Agreements.
(a) The Company agrees not to effect any sale or distribution of any
of its equity securities during the 10 days prior to and during the 180 days
beginning on the effective date of any underwritten Demand Registration or any
underwritten Piggyback Registration or any underwritten S-3 Registration
(except as part of such underwritten registration or pursuant to registrations
on Form S-8 or S-4 or any successor forms thereto) unless the underwriters
managing the offering otherwise agree to a shorter period.
(b) The Holders agree not to effect any sale or distribution of any
equity securities of the Company during the eighteen (18) month period
following the date of this Agreement; provided, that such restriction shall
not apply to (i) transactions related to Common Stock acquired in open market
transactions after the date of this Agreement, (ii) sales or distributions
conducted pursuant to Section 3 of this Agreement, or (iii) transfers to
Affiliates, or other private transactions which do not require registration
under the Securities Act, provided that the transferee pursuant to this
Section 5(b)(iii) agrees in writing to be subject to the terms hereof to the
same extent as if the transferee were a Holder hereunder.
6. Registration Procedures.
Whenever the Holders request that any Registrable Common Stock be
registered pursuant to this Agreement, the Company shall use its best efforts
to effect the registration and the sale of such Registrable Common Stock in
accordance with the intended methods of disposition thereof, and pursuant
thereto the Company shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement with
respect to such Registrable Common Stock and use its best efforts to cause
such Registration Statement to become effective as soon as practicable
thereafter; and before filing a Registration Statement or Prospectus or any
amendments or supplements thereto, furnish to the Holders of Registrable
Common Stock covered by such Registration Statement and the underwriter or
underwriters, if any, copies of all such documents proposed to be filed,
including documents incorporated by reference in the Prospectus and, if
requested by such Holders, the exhibits incorporated by reference, and such
Holders shall have the opportunity to object to any information pertaining to
such Holders that is contained therein and the Company will make the
corrections reasonably requested by such Holders with respect to such
information prior to filing any Registration Statement or amendment thereto or
any Prospectus or any supplement thereto;
(b) prepare and file with the SEC such amendments and supplements to
such Registration Statement and the Prospectus used in connection therewith as
may be necessary to keep such Registration Statement effective for a period of
not less than 180 days, in the case of a Demand Registration or an S-3
Registration, or such shorter period as is necessary to complete the
distribution of the securities covered by such Registration Statement and
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during
such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such Registration Statement;
(c) furnish to each seller of Registrable Common Stock such number of
copies of such Registration Statement, each amendment and supplement thereto,
the Prospectus included in such Registration Statement (including each
preliminary Prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Common Stock
owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Common Stock under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such
seller to consummate the disposition in such jurisdictions of the Registrable
Common Stock owned by such seller (provided, that the Company will not be
required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this subparagraph (d), (ii)
subject itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction);
(e) notify each seller of such Registrable Common Stock, at any time
when a Prospectus relating thereto is required to be delivered under the
Securities Act, of the occurrence of any event as a result of which the
Prospectus included in such Registration Statement contains an untrue
statement of a material fact or omits any fact necessary to make the
statements therein not misleading, and, at the request of any such seller, the
Company shall prepare a supplement or amendment to such Prospectus so that, as
thereafter delivered to the purchasers of such Registrable Common Stock, such
Prospectus shall not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not
misleading;
(f) in the case of an underwritten offering, enter into such
customary agreements (including underwriting agreements in customary form) and
take all such other actions as the Holders of a majority of number of shares
of the Registrable Common Stock being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Common Stock (including, without limitation, making members of
senior management of the Company available to participate in, and cause them
to cooperate with the underwriters in connection with, "road-show" and other
customary marketing activities (including one-on-one meetings with prospective
purchasers of the Registrable Common Stock)) and cause to be delivered to the
underwriters and the sellers, if any, opinions of counsel to the Company in
customary form, covering such matters as are customarily covered by opinions
for an underwritten public offering as the underwriters may request and
addressed to the underwriters and the sellers;
(g) make available, for inspection by any seller of Registrable
Common Stock, any underwriter participating in any disposition pursuant to
such Registration Statement, and any attorney, accountant or other agent
retained by any such seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors, employees and independent accountants to supply
all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such Registration Statement;
(h) use its best efforts to cause all such Registrable Common Stock
to be listed on each securities exchange on which securities of the same class
issued by the Company are then listed or, if no such similar securities are
then listed, on Nasdaq or a national securities exchange selected by the
Company;
(i) provide a transfer agent and registrar for all such Registrable
Common Stock not later than the effective date of such Registration Statement;
(j) if requested, cause to be delivered, immediately prior to the
effectiveness of the Registration Statement (and, in the case of an
underwritten offering, at the time of delivery of any Registrable Common Stock
sold pursuant thereto), letters from the Company's independent certified
public accountants addressed to each selling Holder (unless such selling
Holder does not provide to such accountants the appropriate representation
letter required by rules governing the accounting profession) and each
underwriter, if any, stating that such accountants are independent public
accountants within the meaning of the Securities Act and the applicable rules
and regulations adopted by the SEC thereunder, and otherwise in customary form
and covering such financial and accounting matters as are customarily covered
by letters of the independent certified public accountants delivered in
connection with primary or secondary underwritten public offerings, as the
case may be;
(k) make generally available to its stockholders a consolidated
earnings statement (which need not be audited) for the 12 months beginning
after the effective date of a Registration Statement as soon as reasonably
practicable after the end of such period, which earnings statement shall
satisfy the requirements of an earning statement under Section 11(a) of the
Securities Act;
(l) promptly notify each seller of Registrable Common Stock and the
underwriter or underwriters, if any:
(i) when the Registration Statement, any pre-effective
amendment, the Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement has
been filed and, with respect to the Registration Statement
or any post-effective amendment, when the same has become
effective;
(ii) of any written request by the SEC for amendments or
supplements to the Registration Statement or Prospectus;
(iii) of the notification to the Company by the SEC of its
initiation of any proceeding with respect to the issuance by
the SEC of any stop order suspending the effectiveness of
the Registration Statement; and
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any
Registrable Common Stock for sale under the applicable
securities or blue sky laws of any jurisdiction.
At all times after the Company has filed a registration statement
with the SEC pursuant to the requirements of either the Securities Act or the
Exchange Act, the Company shall file all reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder, and take such further action as any Holders may
reasonably request, all to the extent required to enable such Holders to be
eligible to sell Registrable Common Stock pursuant to Rule 144 (or any similar
rule then in effect).
The Company may require each seller of Registrable Common Stock as to
which any registration is being effected to furnish to the Company any other
information regarding such seller and the distribution of such securities as
the Company may from time to time reasonably request in writing.
Each seller of Registrable Common Stock agrees by having its stock
treated as Registrable Common Stock hereunder that, upon notice of the
happening of any event as a result of which the Prospectus included in such
Registration Statement contains an untrue statement of a material fact or
omits any material fact necessary to make the statements therein not
misleading (a "Suspension Notice"), such seller will forthwith discontinue
disposition of Registrable Common Stock until such seller is advised in
writing by the Company that the use of the Prospectus may be resumed and is
furnished with a supplemented or amended Prospectus as contemplated by Section
6(e) hereof, and, if so directed by the Company, such seller will deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies then in such seller's possession, of the Prospectus covering such
Registrable Common Stock current at the time of receipt of such notice;
provided, however, that such postponement of sales of Registrable Common Stock
by the Holders shall not exceed ninety (90) days in the aggregate in any one
year. If the Company shall give any notice to suspend the disposition of
Registrable Common Stock pursuant to a Prospectus, the Company shall extend
the period of time during which the Company is required to maintain the
Registration Statement effective pursuant to this Agreement by the number of
days during the period from and including the date of the giving of such
notice to and including the date such seller either is advised by the Company
that the use of the Prospectus may be resumed or receives the copies of the
supplemented or amended Prospectus contemplated by Section 6(e). In any event,
the Company shall not be entitled to deliver more than three (3) Suspension
Notices in any one year.
7. Registration Expenses.
All expenses incident to the Company's performance of or compliance
with this Agreement, including, without limitation, all registration and
filing fees, fees and expenses of compliance with securities or blue sky laws,
listing application fees, printing expenses, transfer agent's and registrar's
fees, cost of distributing Prospectuses in preliminary and final form as well
as any supplements thereto, and fees and disbursements of counsel for the
Company and all independent certified public accountants and other Persons
retained by the Company (all such expenses being herein called "Registration
Expenses") (but not including any underwriting discounts or commissions
attributable to the sale of Registrable Common Stock or fees and expenses of
counsel representing the Holders of Registrable Common Stock), shall be borne
by the Company. In addition, the Company shall pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit or quarterly review, the expense of any liability insurance and the
expenses and fees for listing the securities to be registered on each
securities exchange on which they are to be listed.
8. Indemnification.
(a) The Company agrees to indemnify, to the fullest extent permitted
by law, each Holder, its officers, directors and affiliates and each Person
who controls such Holder (within the meaning of the Securities Act) against
all losses, claims, damages, liabilities and expenses arising out of or based
upon any untrue or alleged untrue statement of material fact contained in any
Registration Statement, Prospectus or preliminary Prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or any violation or alleged violation by the
Company of the Securities Act, the Exchange Act or applicable "blue sky" laws,
except insofar as the same are made in reliance and in conformity with
information relating to such Holder furnished in writing to the Company by
such Holder expressly for use therein or caused by such Holder's failure to
deliver to such Holder's immediate purchaser a copy of the Registration
Statement or Prospectus or any amendments or supplements thereto (if the same
was required by applicable law to be so delivered) after the Company has
furnished such Holder with a sufficient number of copies of the same. In
connection with an underwritten offering, the Company shall indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the Holders.
(b) In connection with any Registration Statement in which a Holder
of Registrable Common Stock is participating, each such Holder shall furnish
to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such Registration Statement
or Prospectus and, to the extent permitted by law, shall indemnify the
Company, its directors and officers and each Person who controls the Company
(within the meaning of the Securities Act) against any losses, claims,
damages, liabilities and expenses arising out of or based upon any untrue or
alleged untrue statement of material fact contained in the Registration
Statement, Prospectus or preliminary Prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or omission is
made in reliance on and in conformity with information or affidavit so
furnished in writing by such Holder expressly for use in the Registration
Statement; provided, however, that the obligation to indemnify shall be
several, not joint and several, among such Holders and the liability of each
such Holder shall be in proportion to and limited to the net amount received
by such Holder from the sale of Registrable Common Stock pursuant to such
Registration Statement.
(c) Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent will not
be unreasonably withheld). An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim shall not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party there may be one or more legal or equitable
defenses available to such indemnified party which are in addition to or may
conflict with those available to another indemnified party with respect to
such claim. Failure to give prompt written notice shall not release the
indemnifying party from its obligations hereunder.
(d) The indemnification provided for under this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and shall survive the transfer of securities.
(e) If the indemnification provided for in or pursuant to this
Section 8 is due in accordance with the terms hereof, but is held by a court
to be unavailable or unenforceable in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified person as a result of such losses,
claims, damages, liabilities or expenses in such proportion as is appropriate
to reflect the relative fault of the indemnifying party on the one hand and of
the indemnified party on the other in connection with the statements or
omissions which result in such losses, claims, damages, liabilities or
expenses as well as any other relevant equitable considerations. The relative
fault of the indemnifying party on the one hand and of the indemnified person
on the other shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the indemnifying party or by the indemnified party, and by such party's
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. In no event shall the liability of any
selling Holder be greater in amount than the amount of net proceeds received
by such Holder upon such sale or the amount for which such indemnifying party
would have been obligated to pay by way of indemnification if the
indemnification provided for under Section 8(a) or 8(b) hereof had been
available under the circumstances.
9. Participation in Underwritten Registrations.
No Person may participate in any registration hereunder which is
underwritten unless such Person (a) agrees to sell such Person's securities on
the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements and (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
10. Rule 144.
The Company covenants that it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder, and it will take such further
action as any Holder may reasonably request to make available adequate current
public information with respect to the Company meeting the current public
information requirements of Rule 144(c) under the Securities Act, to the
extent required to enable such Holder to sell Registrable Common Stock without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (ii) any similar rule or regulation hereafter adopted by
the SEC. Upon the request of any Holder, the Company will deliver to such
Holder a written statement as to whether it has complied with such information
and requirements.
11. Miscellaneous.
(a) Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile or similar writing)
and shall be given,
If to the Company:
eUniverse, Inc.
0000 Xxxxxxxx Xxxx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: President
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx, LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxxxxxx Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Stockholder:
550 Digital Media Ventures Inc.
c/o Sony Music Entertainment, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Senior Vice President
and General Counsel of
550 Digital Media Ventures, Inc;
and Senior Vice President
and General Counsel - Sony Music
Facsimile No.: (000) 000-0000
If to a transferee Holder, to the address of such Holder set forth in
the transfer documentation provided to the Company;
in each case with copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
or such other address or facsimile number as such party (or transferee) may
hereafter specify for the purpose of providing notice to the other parties.
Each such notice, request or other communication shall be effective (a) if
given by facsimile, when such facsimile is transmitted to the facsimile number
specified in this Section and the appropriate facsimile confirmation is
received or (b) if given by any other means, when delivered at the address
specified in this Section.
(b) No Waivers. No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
(c) Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, it being understood that subsequent Holders
of the Registrable Common Stock are intended third party beneficiaries hereof.
(d) Governing Law. This Agreement shall be construed in accordance
with and governed by the law of the State of New York, without regard to
principles of conflicts of law.
(e) Jurisdiction. Any suit, action or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,
this Agreement or the transactions contemplated hereby may be brought in any
federal or state court located in the State of California, and each of the
parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such
suit, action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 10(a)
shall be deemed effective service of process on such party.
(f) Waiver of Jury Trial.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(g) Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
(h) Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersedes all prior agreements and understandings, both oral and written,
between the parties with respect to the transactions contemplated herein. No
provision of this Agreement or any other agreement contemplated hereby is
intended to confer on any Person other than the parties hereto any rights or
remedies.
(i) Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
(j) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent
possible.
(k) Amendments. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
without the prior written consent of the holders of a majority of the
Conversion Shares (as constituted on the date hereof); provided, however, that
the consent or agreement of the Company shall be required with regard to any
termination, amendment, modification or supplement of, or waivers or consents
to departures from, the terms hereof, which affect the Company's obligations
hereunder.
(l) Equitable Relief. The parties hereto agree that legal remedies
may be inadequate to enforce the provisions of this Agreement and that
equitable relief, including specific performance and injunctive relief, may be
used to enforce the provisions of this Agreement.
(m) Costs and Expenses. Except as otherwise expressly provided for
herein, each party to this Agreement shall bear its own costs and expenses,
including but not limited to attorneys' fees and expenses, in connection with
the closing of the transactions contemplated hereby.
[Execution Page Follows]
WITNESS WHEREOF, this Registration Rights Agreement has been duly
executed by each of the parties hereto as of the date first written above.
550 DIGITAL MEDIA VENTURES INC.
By: /s/ Xxxx Xxxxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Senior Vice President and General
Counsel
EUNIVERSE, INC.
By: /s/ Xxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chairman and Chief Executive
Officer
